Taiwan’s FPCC cuts December white oil supplies to China by 28%

02 December 2011 10:07  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corporation (FPCC) will supply 500 tonnes of white oils to China for December this year, which is a 28% decline from 700 tonnes in November, a company source said on Friday.

The majority of the cargoes will be sold to contract buyers at $1,450-1,550/tonne on an FOB (free on board) basis, the source said.

However, the buying interest for December material from most downstream buyers in China is low because they are expecting the prices to drop further, a Chinese trader said.

The December prices of food-grade white oil is currently at around $1,450-1,550/tonne FOB Taiwan, according to a Chinese buyer.

In addition, the buyers are reducing their expenditure towards the end of the year, the trader added.

FPCC has a steady supply of white oils with a production capacity of 4,000-5,000 tonnes/month, while Chinese demand for the product is expected to rise next year, when the 5% export tariff for white oils under the Taiwan-China Economic Cooperation Framework Agreement (ECFA) is abolished, a second trader in China said.

Food-grade white oil is a highly refined oil that is used in the manufacture of food-related cosmetic and pharmaceutical applications.

($1 = CNY6.37)

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By: Kim Lu
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